Market Outlook Finally after black Monday, things has sort of stabilized. From here onward till the end of the year, I believe the market will climb moderately slow. No driving factors, just the typical year end rally.

How I would trade in this market:I have about 8 diagonal calls running. I will be holding about 30% cash ready to deploy into the index and my fav SVXY like during the black monday for CRAZY CRAZY returns from just selling puts. I will also be doing spreads, last month I only did 1 spread for a 40% returns over risk. Facebook closed above $90.My NOV covered call hit my stop loss as it shoot so far up in a few days, I lost about $6K.. OUCH!!!

The only reason stocks can go up is because they can also go down. It is this risk that keeps investors in check and that keeps people from paying an infinite amount of money for shares in a business. The reintroduction of risk, in the context of this recent sell-off, is the best thing that could have possibly happened. A steadily climbing market lulls investors into a false sense of security, convincing them to take more risk than they could otherwise stomach. Weeks like the one we just experienced are an important reminder of exactly how much risk you accepted when designing your portfolio. Volatility is scary. It's even scarier when you are in or near retirement, or you have under-saved, and you need the market to keep climbing to hit your number. On the other hand, investors who are still in the asset-accumulation phase are probably frustrated that the market bounced back before they could invest more capital.

Stocks may be the best-performing asset you can hold for the long term, but the price of that performance is volatility. If your head doesn't know that, or your stomach can't take it, then you'll likely miss the long-term benefits of ownership, because you'll sell at the worst time.